Filner: New office-space lease saves $4.8M

DOWNTOWN SAN DIEGO  Mayor Bob Filner announced Tuesday that his volunteer lease negotiator has struck a second deal that is expected to save the city $4.8 million over six years with a new lease for nearly 142,000 square feet of office space.

The deal was negotiated by Hughes Marino principal Jason Hughes, who was appointed earlier this year by Filner as an unpaid special adviser on downtown real estate. Hughes also brokered a deal in May on at least 77,000 square feet of office space that saved the city $15.8 million over five years.

The latest deal is for leased property at 1010 Second Ave. The city had been paying $1.74 per square foot and the new cost is $1.17 in the first year with a 3 percent increase in each additional year of the contract.

Filner estimated the deal would lower the city’s average monthly costs from $246,000 to $179,000 during its six-year term.

“This is a significant savings for the taxpayers and a direct result of rethinking the way the city uses office space downtown,” Filner said in a statement. “I am looking creatively at our downtown leases in order to save taxpayer dollars, which can now go toward needed services such as street repairs, public safety and water lines.”

The deal continues to back up Hughes’ side in a public disagreement he had with Filner’s predecessor, Jerry Sanders. In 2010, Sanders suggested that a new City Hall to house all the city’s downtown employees would save money over continuing to lease overflow space for workers.

Hughes publicly questioned the city’s downtown office lease projections, and then in August 2011 offered to renegotiate the leases for free, an offer that would allow him to prove he was right. The city, once it dropped the new City Hall idea, rejected Hughes’ volunteer offer and began hunting for a firm that would collect brokerage fees for the service.